Higher Education 20: 301-321, 1990. �9 1990 Kluwer Academic Publishers. Printed in the Netherlands.

'Hard' decisions and 'tough' choices: the business approach to university decline

CYNTHIA HARDY Associate Professor of Policy, Faculty of Management, McGill University, 1001 Sherbrooke West, Montreal, Canada, H3A 1G5

Abstract. This paper critically examines the solutions to university decline that emphasize selective cutbacks, in which certain areas are phased out to protect others. The experiences of two Canadian universities show that these kinds of 'hard' decisions generate a considerable amount of political conflict. While the business perspective recommends decisive action, it provides little advice about how these actions can be implemented. It may even intensify conflict and worsen an already difficult situation. The paper argues that we need to learn about the management of both conflict and collegiality, as well as the conditions which make 'tough' choices necessary, before we can successfully tackle decline.

Introduction

The environment for many universities in recent years has been one of decline - in resources, students, or both. US universities experienced~reductions in enrolment during the seventies (for example, Cheit, 1973; Mayhew, 1973; Leslie, 1980). Later that decade, many universities had to deal with funding restrictions as state budgets were frozen or cut (for example, Mortimer and Tierney, 1979; Cameron, 1983; Simpson, 1983). In the UK, 1981 brought about a round of targetted cutbacks in government funding (Times Higher Education Supplement, 1981) which, for some universities, worked out at thirty and forty per cent reductions over the following three year period (Walford, 1987; Sizer, 1988a; 1988b; Lee and Piper, 1988). Canada also saw the beginnings of enrolment decline and financial austerity in university sectors during the seventies (Leslie, 1980; Hardy, 1984). Universities elsewhere in Europe have experienced similar problems (Dijkman and Savenije, 1983).

For the most part, the 1980s has seen a continuation of these trends. As governments have become concerned with public sector spending, they have also become increasingly interested in how that money is spent - in universities as well as elsewhere. Axelrod (1986) argues that this economic frame of reference has always existed and, in fact, accounts for the comparatively generous funding that universities received in the 1960s. What has changed is the belief that universities are a good investment into a growing suspicion that they are neither efficient nor effective producers of society's needs. The result has been the continuation of financial restraint, and increased government concern with efficiency and value-for- money, perhaps best illustrated by the UK's Jarratt Report (Committee of Vice- Chancellors and Principals, 1985). The report, written by the Steering Committee

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for Efficiency Studies in Universities, recommends an industrial model or 'ethos' (Jones, 1986) for universities with an emphasis on formal long term planning with the vice-chancellor acting as a chief executive officer (Jones, 1986; Sizer, 1988b; Lee and Piper, 1988).

As governments have become interested in the transfer of business principles into the higher education sector so, too, has the academic literature. In the same way that higher education borrowed from political science to forge its models of governance in the 1960s (Sibley, 1986); it has been importing from the administrative sciences in the 1980s. And so, for example, models of strategic planning (Cope, 1978; Doyle and Lynch, 1979; Keller, 1980), performance evaluation, value added (Miller, 1979; 186) and program review (Barak, 1986; Simpson, 1983; Harris and Holdaway, 1983; Benoist, 1986) have found their way into the university sector.

This business perspective has, in the context of decline, often been manifested in recommendations for 'hard' decisions and 'tough' choices. In other words, universities have been told that declining resources necessitate a more critical look at their various programs and disciplines with a view to phasing out certain areas. Advocates of strategic planning have recommended that administrators carry out internal assessments of strengths and weaknesses and external appraisals of environmental threats and opportunities. This information is then used to cut out those programs and departments that lack either buoyant demand or academic strength, and redirect resources to areas with more potential. The vice-chancellor, as chief executive officer, has sufficient authority to implement the necessary changes.

This literature suggests that universities should adopt a more planned and strategic approach to retrenchment and, if necessary, phase out faculties and faculty which are no longer central to the mission, rather than spreading reductions equally across areas in an 'across-the-board' approach; much like a business which, after reviewing market conditions, decides to divest its activities in a certain area (for example, Mayhew, 1979; Porter et al., 1979; Wiseman, 1979; Mingle, 1981; Heydinger, 1982; Lutz, 1982; Cameron, 1983; Dube and Brown, 1983; Richardson and Gardner, 1983; Shirley, 1983). In some respects, these recommendations appear seductive since they offer the protection of certain areas, albeit at the expense of weaker ones: sharing the pain penalizes everyone; radical surgery may be necessary to save the patient.

This perspective is, however, worth a second look. For example, strategic planning has been the source of considerable criticism in the business world (Kiechel, 1982; 1984; Business Week, 1984; James, 1984; Gray, 1986). Business Week found that nineteen of the thirty three strategic plans it reviewed had been unsuccessful. It was estimated that less than ten percent of the strategic plans that were recommended were ever implemented (Kiechel, 1982). It has also been argued that strategic planning was designed for conditions of growth and not decline (James, 1984). If business has encountered such problems, universities would appear to be even more vulnerable since they are quite unlike the typical business enterprise. They are decentralized, loosely coupled (Weick, 1976), and diversified in highly specialized areas, with complex decision making structures, and are often highly constrained by government funding and regulations, academic freedom and

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tenure regulations. Universities can not close faculties or fire tenured professors in the way that corporations shut down factories and dismiss employees.

Universities would appear, then, to involve different requirements than the stereotypical business enterprise. Proponents of the incorporation of a business perspective into university decision making have argued that they are not advocating commercial management but an executive management model which, although rational, is not necessarily unitary and can operate under a pluralistic or political framework (for example, Lee and Piper, 1988). Executive management can, it is argued, accommodate conflict and disagreement, and behavioural and political skills can be used to complement the management and planning processes proposed in documents like the Jarratt Report (Lee and Piper, 1988; Sizer, 1988b).

The problem is that the literature has little to offer in the way of describing these behavioural and political skills and explaining how they fit into a managerial model. The strategic planning model, for example, focusses on formulation, not im- plementation. It has little to say about how plans, formulated following a strategic assessment, can be translated into action; it largely ignores the process of change; and, by assuming a top down decision model, it sidesteps the problems of politics and resistance to change.

The industrial model thus recommends decisive action, but offers little on how to implement these actions. It downplays the importance of social and political skills. Advanced analytical systems are sold as the key to effective administration; although the skills, concepts and frames of reference embodied in them are of limited value in managing the 'human' side of planning and administration (Lyles and Lenz, 1982). It has been argued that what is lacking in the literature is not an understanding of the science of planning, which is already well served, but more insight into the art of management (Mintzberg, 1976), particularly in the context of scarce resources.

This paper examines the experiences of two Canadian universities that tried to take the type of hard decision that might be advocated by the business approach - that is, selective and differential cutbacks - instead of allocating reductions equally throughout the institution. One university tried to close a faculty, and the second dismissed tenured professors. It attempts to describe events at the two universities in question and show that in order to understand what happened a political analysis is required. The analysis focusses on both the political context - the interest groups that were involved and the power they possessed - and the political process - how administrators managed these interest groups. It is argued that if senior university administrators are to be in a position to implement the recommendations of the industrial perspective, they will have to conduct a political assessment of the situation and develop the skills that will enable them to successfully manage it. The remainder of this paper is as follows: the universities are introduced in the next section, followed by a description of the events that took place; a political framework is then presented, followed by an analysis of, first, the political context and, second, the political processes in the two institutions; finally, some conclusions are drawn.

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The univers i t i e s ~

The University of British Columbia (UBC) was founded in 1909. It is the largest of the three universities in the province of British Columbia. In 1986, it had 27,000 students, of whom 4,000 were graduates. Its operating budget exceeded $ 260 million, added to which the university attracted $ 60 million in research grants. It had over 1,700 full time, tenure stream faculty, and over 4,000 nonacademic staff. UBC had a bicameral governing system, typical of Canadian universities. A board of governors consisting of the chancellor, the president, eight government appointees, two faculty members, two students, and one nonacademic staff member, was responsible for financial decisions; while senate, comprising of over eighty members, including deans, faculty representatives and seventeen students was responsible for academic decisions. See Figure 1.

The University of Toronto (UT), founded in 1827, is the largest university in Canada. It has fourteen faculties, spread over three campuses. In 1986, it had 50,000 students, including nearly 10,000 graduates; over 2,000 professors; an operating budget of $ 360 million; and research grants of $ 90 million. Its structure was somewhat different from that of UBC. First, there was an additional hierarchical layer of vice provosts (see organization chart). Second, UT had a unicameral governing system in which the functions of board of governors and senate were combined in one body, known as governing council. It consisted of fifty members: the chancellor and president; two presidential appointments; sixteen government appointees; eight elected by alumni; twelve by teaching staff; two by administrative staff; and eight by students. See Figure 2.

Both universities are among the larger, older, research oriented Canadian universities. They are both publicly funded: UT receives three quarters of its operating revenue from the Ontario government; UBC receives eighty five percent from the government in British Columbia. Universities in both provinces have experienced funding restrictions in recent years, but of a somewhat different nature.

SIKPL IF IED ORGANIZATION CHANT

O n i w e r s i t l o f British Columbia

Senate Board

I P r e s i d e n t I

1 I

I I I VP ( F i n a n c e ) VP ( A c a d e m i c ) VP (Research)

I I I i

1 I I I I �84 I I I I I I 1 Pharmacy Commerce Arts Forestry Agr icu l tu re Science Medicine Law Dent is t ry EngineerinB Graduate Education

Studies

VP Provost

I I I

Vice Provost (Arts & Science)

Fig. 2.

SIMPLIFIED ORGANIZATION CHART

University of Toronto

Governing Council I

President I I I I

I I I I [ I

VP ( Inst i tu t ional Relations) VP (Business Affairs) VP (Research

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Arts

Music Forestry

I I

Science Medicine

I I [ I I I

Vice Provost Vice Provost (Health Sciences) (Professional Faculties)

I I I

I I I I I I

Pharmacy Nursing Dentistry

I I I ) I I Education Social Work Law Architecture Engineering Nanagement Studies Library Science

In British Columbia, the Social Credit party was re-elected in May 1983 on the basis of a promise to control government spending. It introduced a restraint program involving thirty four legislative acts. The Public Sector Restraint Act specifically enabled tenure to be abandoned in the event of financial problems. Following widespread political protest, the government eventually amended the legislation to allow for exemption by an organization, if the intent of the act was retained through a collective agreement. Accompanying this legislation were reductions in the operating grants to the three universities in the province - in 1983 grants were frozen, and the following two years each saw a five per cent decrease (Dennison, 1987).

Opinions differ as to how long Ontario universities have been subjected to financial restrictions. Some maintain that the problem started as long ago as 1971, when a freeze was put on capital funding for new construction. During the 1970s, the universities' share of the provincial budget fell - from 6.6 per cent in 1972/3 to 5.2 per cent ten years later. Others have traced the troubles back to the late seventies when operating grants failed to match the budgets recommended by the inter- mediary body - the Ontario Council for University Affairs (OCUA). A variety of reports and commissions since 1979 have argued that the system is underfunded and called for the need for injections of new money (see Skolnick, 1986).

Universities in both British Columbia and Ontario have faced funding restric- tions. In the former, this situation has been more recent and more dramatic, involving actual decreases in government operating grants. It has also been accompanied by what has been perceived as a relatively hostile view of universities

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on the part of the government. In Ontario, the situation has been a much more gradual affair as grant increases have, over the years, failed to match increases in inflation, student numbers, and demands for more capital expenditure.

The events leading up to some 'hard' decisions

This section describes the actions taken by the two universities in response to the funding situation.

UBC

In the light of the funding restrictions, the president of the University of British Columbia (UBC) established, in 1984, an advisory committee chaired by the VP (academic) with four professors from different areas. It examined the university's operations, and resulted in a series of letters from the VP (academic) to the deans, asking them to 'show cause' why certain areas should not be discontinued. The deans were expected to respond early in the new year, by which time the president had left, and the VP (academic) become president pro-tem. At the same time, the Senate Budget Committee (SBC) had been developing a procedure to use in the event of program discontinuance. SBC assisted the president on budgetary issues and, following a widening of its mandate in 1982, on academic priorities. It produced a planning document, which rated UBC's programs as core, core related, and noncore, on the basis of various criteria, including: quality; cost; enrolment; uniqueness; and special value to the province or nation. Those programs rated as noncore were considered prospects for closure.

In May 1985, a series of proposals for program elimination was presented to senate by the acting VP (academic) based on, but not identical to, the recommenda- tions of SBC. Senate debated the proposals, and programs in Dental Hygiene, Industrial Education, Recreation Education, Media Technology, the Licentiate in Accounting, and the Diploma in Agricultural Sciences were discontinued. One proposal - in Landscape Architecture - was not approved by senate. In addition, unspecified cuts of $ 3 million were made in the budgets of Arts, Science, Medicine, Applied Science and Education.

These cuts resulted in the elimination of around 100 faculty positions, mainly through the closure of vacant positions. Twelve faculty members received termination notices, of whom nine were tenured. This decision to terminate tenured faculty caused widespread protest. The faculty association gave a vote of no confidence in the board, president Pro-tern, and acting VP (academic), and a committee of inquiry was set up by the Canadian Association of University Teachers. While the numbers may seem low (particularly in the context of some US and UK institutions) the dismissal of tenured faculty was highly symbolic since it was the first time that a Canadian university had terminated tenured faculty in the context of recent financial restrictions.

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UT

One step UT undertook during the period of fiscal restraint was to try to close its Faculty of Architecture. Financial compression was not the only reason for this action. One underlying problem was the 'internecine warfare' that had existed between faculty members for a number of years. The university had been unable to hire a dean. As a result of these internal problems, criticism had grown that the faculty had become ungovernable and teaching standards were falling. The administration elected to close the Faculty in response to these problems, rather than try to upgrade it, because of scarce resources. Architecture had, according to one central administrator, 'placed itself in a difficult position at a time when the university had to make judgements'. The Faculty was not being closed for financial reasons per se, but because the university could not afford the money necessary to improve and rectify the internal problems.

A report, submitted by the vice provost, recommended the closure. It was submitted to Academic Affairs Committee of Governing Council which held hearings in conjunction with the Planning and Resources Committee. A number of interested parties attended these hearings and many, from both inside and outside the university, fiercely opposed it. The strength of feeling made it clear that Governing Council would be unlikely to approve the closure, and the proposal was withdrawn. Another committee was then struck by the president, which recom- mended that the Faculty be made an affiliated college, whose degrees would be administered by the university, but which would have its own budget.

A political framework

The discussion above describes events at two universities where attempts were made to take hard decisions, certainly when compared with the more general compres- sions adopted by other Canadian institutions (Hardy, 1988a, 1990). These events cannot easily be understood from the perspective of a managerial model alone: it is necessary to use a political framework.

There are a number of reasons why a political model is useful here. First, it has often been applied to universities (Bucher, 1970; Ladd, 1970; Baldridge, 1971; Beyer, 1976; 1982; Baldridge etal., 1978; Gross and Gambusch, 1977; Pfeffer and Salancik, 1974; Davies and Morgan, 1982; Hackman, 1985; Welsh and Slusher, 1986). The political model assumes that individuals are motivated by self interest, rather than the common interest that underlies the traditional collegial model (Hardy et al., 1983). The division of labour (Cyert and March, 1963; Pettigrew, 1973) or, in the case of universities, the loosely coupled nature of faculties and departments (Weick, 1976) produces a number of groups with potentially conflicting interests; and the decentralization and dispersion of power in these professional bureaucracies (Mintzberg, 1979) provide them with the means to influence decisions.

In order for political decision making to occur, however, these interest groups must possess, not only the ability to influence decision making, but also the

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motivation to do so - there must be a perceived conflict of interest as well as sufficient recourse to power sources (Hardy, 1985a). Loose coupling produces diverse interest groups, but it also enables them to coexist harmoniously by insulating them from each other, and allowing disparate goals to be accommodated. It is only when the groups come into competition with each other that they act politically and use their power; otherwise it is perfectly possible for collegiality to prevail (Hardy et al., 1983).

Scarce resources often provide the motivation for political behaviour - decision making quickly becomes a zero sum game when there are insufficient funds for everyone to achieve their goals. For this reason, neither collegiality, which assumes common interest, or the garbage can (March and Olsen, 1976), which assumes disinterest, are likely to help us in these circumstances (Hardy et al., 1983; Hardy, forthcoming). The use of rational analysis has been found in the context of university cutbacks, but with some evidence of political overtones (Hardy, 1988b). So a second reason for political analysis is the existence of cutbacks (Hardy, 1985b; 1990b). In the case of the 'hard' decisions that are being examined here, a political framework makes even more sense. The fact that certain areas may be targetted for cuts, rather than everyone sharing them equally, intensifies the zero sum game - some interests clearly have a lot to lose; while others have something to gain.

The political analysis used here focusses on both the power of key interest groups and their political behaviour. Power exists as a result of legitimacy, centrality and dependency (Emerson, 1962; Astley and Sachdeva, 1984), and sources include: the control of sanctions, access to information, centrality, expertise, political access, group support, and personal credibility (see, for example, Mechanic, 1962; Crozier, 1964; French and Raven, 1967; Hickson et al., 1971; Pettigrew, 1973; Pfeffer, 1981). For these sources of power to affect decisions, however, they must be mobilized through political action (Pettigrew, 1973), such as negotiation, bargaining and political influence (Baldridge, 1971). Thus, in order to understand decision outcomes we must examine both the political context - power relationships between interest groups - and the political behaviour in which they engage.

The political context

The political context comprises the relationships between the key interest groups in the decision making arena. For the purposes of this analysis, attention is focussed on the central administration; the deans; senate; the board of governors; governing council; and the faculty association. It is recognized that other groups may be relevant to retrenchment decisions, such as students and nonacademic staff, but they did not play a major role in the particular events described here.

UBC

The political context at UBC was characterized by a traditionally weak central

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adminis t rat ion in comparison to the deans who were powerful, independent

'sovereigns' of their particular faculties. While the group of deans was not part of

any formal policy making team; individually they had a great deal of influence on decisions taken by central administrators.

By dint of personality, influence or interest a dean could be about as influential as he wanted to be; but the deans collectively are not built into the organization in the formal sense. The corollary is that the dean has a great deal more autonomy in his own faculty (central administrator).

The deans had retained control of many functions, such as budgetting and

purchasing, which are often carried out centrally in other universities.

This university has prided itself on spending less on administration than any other university in the country. What they've really been doing is spending more on administration because a lot of jobs that should have been done in the president's office have been done in the deans' offices (central administrator).

The deans, as a result of this decentralization, had the monopoly over a considerable

amount of information about the operation of their faculties, which they often chose

to keep to themselves, rather than share it with the central administration.

Information has not been widely shared - it's been kept in the dean's office. [There are] people who operate on the mushroom principle - you leave them in the dark and cover them with whatever it is you cover mushrooms with (central administrator).

They also maintained their independence, by keeping separate from each other.

Deans didn't talk to each other very much. They tended to be very independent and somewhat isolated from each other. Information in the past has been very jealously guarded (dean).

The result was, many argued, that the deans had developed a faculty perspective,

rather than a global view of, and identification with, the institution as a whole.

I think many of the deans think the faculties are the university, and they are best run as faculties rather than integrated into the university (dean).

Consequently, the deans represented a group of competing interests.

UBC has a lot of antagonismin it. It is part of the confrontation politics. The departments shook a stick

at the faculties who shook a stick at the president, and we are coming to answer for it. All the faculties

fought and were vying with each other away from the centre. It was all shenanigans, old boys, slap happy (dean).

SBC was another key interest group at UBC. It did not report directly to senate on the budget, but was responsible for assisting the president. As ' a g r oup of senators representing the university' it had considerable influence on senate, which ultimately had to approve program closures. It was, as a result, frequently consulted by the

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central administrat ion on budgetary matters; even if its advice was not always followed.

SBC advises the president on behalf of the academic sector of the institution. They are perceived to be people who can review the budget from the academic point of view. It lends propriety to the budget development process. Eveiything is run through them, probably more so than in the past (central administrator).

Relations between the faculty association and the central administration were not particularly cordial, at least on the subject of proposed redundancies. Repeated at tempts at establishing agreements on the criteria for the declaration of financial exigency and redundancy procedures had failed. In 1984, an agreement was reached with the executive, but it failed to receive ratification f rom the membership. Subsequent negotiations in 1984 and 1985 also failed.

Finally, UBC's board of governors had a reputation for challenging the central administrat ion when in disagreement. The majori ty of board members were representatives of the Social Credit government and, as such, were felt to be unsympathet ic towards the university. While board members were reluctant to talk about specific issues they, nevertheless, indicated a willingness to make their views clear to the university administration.

If they [the board members] don't think the president is doing something right they speak up on it. There might be the odd specific thing where there has been no agreement, but I don't think I'd like to go into that. Certainly, the board hasn't been reluctant to say 'No' to the president and the administration, 'and here's why'. That message has been communicated (board member).

In summary , the political context at UBC was characterized by a relatively weak central administrat ion surrounded by a myriad of conflicting interests. There was a powerful group of highly individualistic deans. SBC had some power through its ability to influence senate, which had to approve p rogram discontinuance. Negotiations with the faculty association on retrenchment had proved difficult. The board of governors was perceived to share the governments 's concern about inefficiency in the university and to expect the university to take some action.

UT

In comparison with UBC, administration at U T was more centralized. There was a larger and more clearly defined central hierarchy because of the additional layer of vice provosts. Within the central administration, responsibilities were distributed between the various portfolios of the vice presidents and vice provosts. As a result, the central office appeared to have far greater control over budgetting and other procedures than its counterpart at UBC.

There is a highly centralized, bureaucratized central administration which controls everything (professor).

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Budget decisions, in part icular, were taken centrally.

How is the budget decided? A good question. The budget is basically a decision of the provost's office. There is a budget committee, supposedly, which none of the deans of the major faculties are on, which makes very global sorts of decisions (dean).

The existence of governing council , to a certain extent, increased the power of the central administrat ion. Changes, following a review in 1977, restricted its mandate to one o f approving, rejecting or sending back proposals f rom the president. Normal ly , governing council d id not initiate matters.

Within this system, the administration has a lot of power - governing council can reject things or send them back, but it cannot initiate policy which an academic senate, of course, can (vice provost).

Mos t decisions were, in effect, taken by the central adminis t ra t ion and approved by

governing council, par t icular ly those that involved the complex finances and operat ions of the university.

The decisions are made at the centre of the university. We might involve the governors, but not in the true sense, as you might a board. At the moment, we can't afford to have them involved in decision making so we carry out a delicate ballet dance. The decision is really made by the president and VPs (central administrator).

Some issues, however, polar ized the diverse interests represented on governing council. Unlike UBC, where financial matters were judged by a relatively small

group domina ted by government appointees, and academic decisions were taken separately by an, albeit large, group of academics; both financial and academic decisions were ul t imately approved or rejected by a council, which comprised a

number of potent ial ly conflicting interests. So, when contentious issues did arise, it became difficult to create consensus.

The weakness of the structureis that it is always a crapshoot. You can't predict how it will turn out. You don't know who's going to be away, who's going to turn up, what the politics of that particular issue are (central administrator).

The deans were similar to those at UBC in some ways. They were independent

faculty adminis t ra tors and, a l though they did not par t ic ipate in global budget decisions, they had considerable freedom once the budget had been allocated.

Once the deans accept the budget process - or become resigned to it - I would say they don't have much influence on the amount they get. There's a fair trade offthough. We say to the deans: you may not like what you get, but we are not going to muck about in your affairs once you get it (central administrator).

They were also f ragmented and did not form a uni ted pressure group. Unlike UBC, however, this f ragmentat ion did not manifest itself in compet i t ion either amongst themselves or with the central administrat ion.

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The deans are not cohesive or competitive. My inclination would be for cohesion, my experience has been isolation. We've not formed a lobby group. We've not formed a pressure group. We tend to work in isolation (dean).

So, while the UBC deans might be described as politicized, those at UT were relatively more quiescent in that they kept to their own territory.

I don't phone the deans to conspire. I 'm much more likely to get something by conspiring with my vice provost against the other deans, than I am by getting the deans to conspire against the vice provost (dean).

The UT deans also lacked an important source of power. Unlike their counterparts at UBC who were members of senate, they were not members of governing council.

We made the mistake of opting for a unicameral system. It's been a disaster. When we had a senate, if you were a dean you thought you had a definite role in the academic governance of the university. There is no longer any role in this university for deans other than as glorified department heads. You have no role in the academic governance of the university. There is no way deans can communicate directly with governing council (dean).

As a result, there was no arena in which the deans could appeal to and influence the wider university community.

On summary, the political context at UT was such that the central administration appeared to have more power than its counterpart at UBC. Its role in decision making was clearly institutionalized. The deans were less factionalized and there was no evidence that the faculty association was particularly militant. In some respects, governing council further centralized power, although it was clear that, in the event of more contentious issues, consensus might be more difficult to obtain than would be the case in a senate or board.

Managing the political context

Clearly, we must go beyond a simple analysis of the political context, if we are to understand the outcome of events at the two universities. Context, alone, obviously does not explain events; otherwise we might expect UT to have had more success than UBC in implementing its retrenchment plans, whereas the reverse was true. As Pettigrew (1985a, b) has argued, context can be managed. It is not only a barrier to action and change, it is also a source of power, which can be mobilized by some groups in their attempts to bring about the changes and actions they favour. Sizer (1988b) has talked of how institutional leaders create 'on switches' where they build commitment to change, as opposed to 'off switches' in which organizational members fight the idea of change. So, we must also examine the political actions of the interest groups. In effect, we must see how effectively the central administrators in each university managed their respective political contexts.

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UBC

Having decided to implement p rog ram closure, the work done by the SBC, in identifying core and noncore programs, ostensibly played an impor tan t part in formula t ing the proposa ls that were presented to senate. These proposals were, in

reality, also the subject of other influences. They were shaped by the ideas of the president p ro- tem who had, as VP (academic), chaired the 1984 s tudy into cutbacks.

A second influence was that o f the deans. The decentral izat ion of power at UBC

meant that bo th SBC and the central adminis t ra t ion were forced, in formulat ing their recommendat ions , to rely on the deans for informat ion about where cuts should be carr ied out. The deans were not always willing to provide central adminis t ra tors informat ion which, in the view of at least one dean, ' they d idn ' t need' . The deans of the larger faculties, in part icular , had a monopo ly of informat ion and knowledge.

Some deans responded [to SBC] well, others not so well. Some did not want to say where they would cut. It's easy in the small faculties because you can see clearly where they cut - there's no room to play with. When you get to Arts and Medicine it's terribly difficult to get into that whole budget (SBC member).

As opin ion leaders in senate, the deans also had the power to prevent the

implementa t ion o f any proposals , by persuading senate to vote against them.

The deans had to put up a token resistance but couldn't go all the way. If the deans had wanted to put up a fight on the floor of senate, they could have got every one of those [cuts] rescinded (senate member).

The actual recommendat ions that went to senate were not, therefore, a simple

regurgi tat ion of SBC's suggestions, nor were they the straightforward implementa- t ion of a presidential plan; they were also a reflection o f the deans ' willingness and abili ty to negotiate.

In retrospect, the cuts were determined by how persuasive particular deans or department heads were. There were units to be terminated but their dean made a fuss for whatever reason and the unit was kept. No one really knows what SBC recommended. There was significant overlap but some units were taken off. Too much depends on the deans. A strong persuasive dean is likely to get offeasier than he would if it:were judged on need or quality. The process is not as objective as it should be (dean).

The central adminis t ra t ion did not want to make proposals that would produce outr ight opposi t ion. The deans of the larger faculties, such as Medicine, Arts , and Science, thus received percentage reductions in their global budgets, rather than targetted cuts, because they threatened resistance.

SBC wanted to discontinue more things than we were prepared to recommend to senate. In some of those, we didn't have the support of the dean. The last thing we wanted to do was get into senate and end up arguing with the dean (central administrator).

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SBC's participation in the retrenchment exercise may have been as important in legitimating the proposals, as in formulating them. It ostensibly incorporated faculty representation into the decision process, which undoubtedly helped secure senate approval. The power o f the deans, however, meant that some of SBC's recommendations were politically infeasible.

The president's office has to involve us but they don't have to take our advice. Now, they would have a tough time getting it through senate. The only things they took to senate were the things SBC agreed to, except the Arts and Medical targets... Places where we differed they did not take to senate. It is true that the SBC wanted larger cuts than the president's office (SBC member).

UBC's central administration was, then, relatively adept in managing its political context, particularly the deans and senate. It was helped by the sense o f crisis that prevailed in the BC university community at that time, which undoubtedly increased their ability to act. The severity of the cutbacks and the threat to tenure embodied in the restraint legislation created perceptions of crisis, which were heightened by a belief that, if the university did not make some form of significant cutback, the board might take unilateral action. It helps to explain why the deans agreed to at least some form of reduction, since they, too, had become 'aware of the corporate problem' (dean), and it put pressure on senate to take a decision.

Things were presented as a crisis and they had to act now. They were deliberately given information at the last possible minute and, although there was a free debate, they didn't know what they were debating (faculty association representative).

UT

Unlike UBC, administrators did not use a committee like SBC to involve the participation o f faculty members. The committee which proposed the closure was comprised of administrators. It also appeared that the committee considered closure as the only option. Its report was entitled: Recommendation for Closure of the Faculty of Architecture and Landscape Architecture. The only alternative was a large scale reallocation of resources f rom other programs to upgrade Architecture, and it was not considered until the very end of the report. The prospect of an affiliated college was not mentioned. These factors created the impression that central administrators had already made up their minds about the closure.

Was it responsible for the university to adopt as an opening gambit the recommendation that the faculty should close? I don,t know. I think the question could be asked whether the university carefully explored the alternatives (vice provost).

A second problem concerned the timing of the report. An announcement was made that a decision had been taken to close the faculty on January 23rd 1986. The report, however, was not released until February 19th, again contributing to the view that no real consultation had occurred.

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Some major decisions are being made that have an impact on the whole university but very few people are making those decisions. There's no mechanism for discussing them... Architecture was a decision made by Simcoe Hall [central administration] and now they are trying to justify it (dean).

Consul ta t ion was an impor tant issue in a university as large as UT, where the adminis t ra t ion was already perceived to be distanced f rom the university com- munity, making it difficult to mobil ize grass roots suppor t for administrat ive

decisions.

The president has a hierarchical way of dealing with the rest of the university. I'm not sure it's working as well as it might be for him, in terms of getting the community behind him (vice provost).

Central adminis t ra tors at UT suffered because there was no senate in which they

could present the closure of Archi tecture as an academic problem. The external representat ion on governing council immediately brought other interests into play, than would be the case with a group of faculty representatives alone.

There is nowhere to go with academic problems - to have them discussed in a body that somehow brings everyone together. In a senate, I would at least have had the whole university understanding the problem. They don't have to agree with you. It's the one place where the university comes together. We don't have that right now. What you want is not simply to get approval but to get understanding. It's very difficult to communicate right now (vice provost).

As a result, there was no percept ion of a widespread discussion of the closure inside

the academic community. UT was also unable to use its deans as advocates o f the closure. The deans at UBC

were powerful and, in some cases, clearly opposed p rogram closure. The nature of the proposa ls that were presented to senate, however, effectively 'neutral ized ' the opposi t ion, apar t f rom the case of Landscape Architecture, and, as such, the deans

were seen as giving their tacit suppor t to the adminis t ra t ion 's .plan. The deans at UT did not oppose the closure but, on the other hand, they did not lend any support . In effect, they disassociated themselves f rom the problem, leaving it in the hands of the

central administrat ion.

When I came into this job I asked myselfi what was my role? Was it advocate of the departments or central administration's representative in the faculty, I chose the former. Given that point of view I am not going to initiate a recommendation to close a particular area in the faculty. That can only happen as part of a broad look at the university. I think that has to be a central initiative and responsibility (dean).

In summary, central adminis t ra tors at both universities faced a difficult s i tuation because of the interest groups they faced. UBC was more successful, however, in neutral izing the oppos i t ion of the deans and, in effect, convert ing it into tacit suppor t during the senate debate. SBC also legitimized the proposals by involving the independent analysis of a group of faculty members. The lack of consultat ion pr ior to the announcement of the decision and the disassociation of the deans helped to create the impression at UT that the closure proposa l was solely the work of central adminis t ra t ion, which had not fully investigated the options open to it. UT

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also faced another disadvantage - the lack of a perceived crisis that might result in a mandate for change. The gradual cutbacks in Ontario and the relatively supportive attitude of the new Liberal government had none of the drama of UBC's situation.

We need a greater sense that there is a problem. I don't think the university as a whole perceives a problem (dean).

It is obviously impossible to say that, had UT used more extensive consultation, been able to create perceptions of a crisis, and mobilized the deans, they would have been successful. This section, nevetheless, gives some indication of why UT failed, and the strategies that were succesfully used to manage resistance at UBC.

Conclusions, outcomes and impfications

This section draws some conclusions from the experiences of UT and UBC and discusses the implications of the business approach to university decline. The first observation is that, clearly, it is one thing for central administrators to decide on the principle of selective cutbacks; it is another to actually carry out them out. Plans to phase out faculties and programs cannot easily be imposed on complex and decentralized universities. These decisions are not implemented in a vacuum, but in a political context. The experiences of the two universities illustrate the importance of managing the political process in implementing these types of decisions.

We felt Architecture was a sure thing. It was the right decision but obviously the method wasn't the right method (central administrator).

Unfortunately, the business perspective offers little help in this regard. While it may offer guidance as to how to ascertain which areas are less productive or effective, it tends to emphasize economic variables and analytic techniques rather than social and political skills. In other words, it may tell you what to do but it does not tell you how to do it. While an executive management model may be, in theory, compatible with a political perspective, there exists very little work that has attempted to combine the two. We need much more explicit research into how one can combine an accountable, effective system that creatively manages scarce resources with the professional, decentralized, complex decision making processes found in univer- sities.

Second, the results of the studies suggest that the implementation of 'hard' decisions may, in certain circumstances, be counterproductive. The industrial approach focusses on the visible and the measurable - economic and financial variables - and while financial resources are clearly a matter of concern for university administrators, they are not the only criteria for success. A university can have black ink on the bottom line but be losing high quality staffand students - the very things that make it excellent. Excellence is, thus, not only determined by the balance sheet but by the ability to recruit and nurture gifted and productive

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individuals which, in turn, depends on high levels of morale, commitment and motivation. Universities may 'succeed' in carrying out proposed program closures, but 'fail' to protect the morale an commitment of faculty members.

The tough choices advocated in the business literature are likely to escalate the political conflict that surrounds declining resources, not resolve it. Draconian measures - terminations and program closures - can send shock waves through the university communky. The more marketable individuals will leave to find less hostile surroundings; potential recruits will look at other universities where tenure is more secure; remaining individuals will resort to political infighting, as they try to protect their departments. We need, as a result, a clearer idea as to when hard decisions become necessary and when the critical point is reached. Universities such as Salford and Aston in the UK have faced major funding reductions that clearly required drastic action (Walford, 1987; Sizer, 1988a). Canadian universities, in contrast, have tended to experience much more gradual compressions and the use of an across-the-board approach may have been the more effective mechanism for recovery and the protection of morale under those circumstances. Similarly, there is some evidence to suggest that different types of institution require different strategies. For example, smaller specialist institutions may have to be more selective in allocating resources (Zammuto and Cameron, 1985; Parker and Zammuto, 1986) and different types of decline may require different strategies (Cameron, 1983). While some work has been done on delineating the conditions underwhich selective cutbacks become necessary (for example, Levine 1978; 1979), there remains an inadequate understanding of the exact circumstances that render 'hard' decisions both a necessary and effective mechanism for recovery.

Finally, we need to learn more about how to manage collegiality. Universities are supposedly collegial institutions (Millett, 1962), and some research suggests that recovery from decline involves leaders with the ability to motivate and redirect faculty (Chaffee, 1984). It has also been argued that post decline recovery involves a sense of shared mission (Parker, 1987). Despite its importance to the university setting, and even though there is no reason to suggest that collegiality is self- generating or self-sustaining, particularly in the context of scarce resources and external accountability, it has rarely been the subject of inquiry (Childers, 1981). If universities are to respond effectively to the changes demanded of them, they will depend on the survival of collegiality and, if that is the case, leaders will have to learn how to create, manage and nurture it, using the political and social skills described earlier (Hardy, 1987; forthcoming); instead of conceptualizing dissensus and disagreement in political terms, with the implicit idea that if they would somehow go away, universities could be better managed. We need, in summary, a greater understanding of the management of both politics and collegiality: the former if we are to resolve conflict which manifests itself around necessary changes; the latter if we are ever to avoid conflict.

This paper has argued that we should be wary about adopting the business approach to solve the problems of university decline. It represents, at best, an incomplete solution. It recommends selective decisions and the reatlocation of resources, but fails to deal with the political ramifications of such choices. There is

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inadequate understanding about the conditions in which such recommendations are appropriate. It also fails to recognize the importance of collegiality to recovery from decline, and the types of decision that it recommends may damage collegiality. Having said this, a more externally oriented and financially aware approach will be an integral part of university administration during the nineties. What is needed, therefore, is research that refines, critiques, complements and extends the business perspective.

Notes

1. The methodology selected to track and probe the attempt to close a faculty at UT and the decision to close programs and terminate tenured faculty at UBC was primarily qualitative. In each university, interviews were carried out with representatives of the central administration, including the president and vice presidents; the deans; senate; the board of governors; governing council; the faculty association; and members of key committees. In addition, interviews were conducted with representatives from the ministry responsible for education; and the intermediary body in each province 2. In these two universities, 80 individuals were interviewed. These interviews were semi- structured, lasted between one and three hours, and were recorded. The quotations cited here were taken from the recorded interviews. They are anonymous in order to protect the individuals concerned, and are used to reflect a common pattern of thought among the particular interest group. In addition to the interviews, documentation was collected and analyzed. It included internal documents such as the relevant reports, correspondance and memoranda, as well as such published material as annual reports, budgets, etc. As with every methodology, there are limitations with this approach. It proved necessary to screen out certain interest groups, namely students and nonacademic staff, in order to reduce the study to a manageable size. The focus was only on the institutional response to financial restraint- the study did not explore the actions at the faculty level. A qualitative approach was considered essential to tap the political processes that occurred around the decisions. While case studies obviously have limited generalizability, they are often the most effective way of probing into sensitive decisions. These limitations were reduced somewhat by the use of comparative analysis in the context of the larger study 2 that involved six universities.

2. The research at UBC and UT is part of a larger study of six Canadian universities, funded bY the Social Sciences and Humanities Research Council of Canada. Interviews and the analyses of documentation were conducted in a similar fashion at these other universities.

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